Wall Street Breaks 7-Week Losing Streak05/27 15:59
Technology companies led a broad rally for stocks Friday as Wall Street
notched its best week in 18 months. The gain broke a seven-week losing streak
for the market, the longest such stretch since 2001.
NEW YORK (AP) -- Technology companies led a broad rally for stocks Friday as
Wall Street notched its best week in 18 months. The gain broke a seven-week
losing streak for the market, the longest such stretch since 2001.
The S&P 500 rose 2.5% and finished 6.6% higher for the week, its best weekly
gain since November 2020. The Dow Jones Industrial Average rose 1.8% and the
tech-heavy Nasdaq gained 3.3%.
The strong finish for the week came as investors received potentially
encouraging news about inflation. The Commerce Department said that inflation
rose 6.3% in April from a year earlier, the first slowdown since November 2020
and a sign that high prices may finally be moderating, at least for now.
The report was released as Wall Street looks for any signal that inflation
could be easing, while trying to figure out just how low stocks might sink.
"At this point that's all the market needs," said Ross Mayfield, investment
strategy analyst at Baird. "It's definitely one of the signs you would want to
The S&P 500 ended 100.40 points higher at 4,158.24. The Nasdaq rose 390.48
points to 12,131.13. It was the third straight gain for both indexes. The Dow
rose 575.77 points to 33,212.96, its sixth-straight gain.
Smaller company stocks also gained ground. The Russell 2000 rose 49.66
points, or 2.7%, to 1,887.90.
The broader market has been in a slump for nearly two months as concerns
about inflation and rising interest rates pile up. Investors were spooked last
week by disappointing reports from key retailers, including Walmart and Target,
which stoked fears about rising inflation hitting profit margins and crimping
Trading remained choppy throughout the week, though the market mostly pushed
higher, as retailers including Macy's and Dollar General released encouraging
earnings reports and financial updates.
Retailers were among the biggest gainers Friday as investors continued
reviewing the latest round of earnings to get a better sense of just how much
pain rising inflation is inflicting on businesses and consumers. Beauty
products company Ulta Beauty surged 12.5% for the biggest gain in the S&P 500
after raising its profit forecast for the year. Amazon rose 3.7%.
Disappointing financial updates and earnings weighed on several companies.
Clothing retailer American Eagle fell 6.6% after reported weak first-quarter
Inflation is at a four-decade high and has been persistently squeezing
businesses. Higher costs prompted companies to raise prices on everything from
food to clothing to protect their margins and consumers remained resilient.
Russia's invasion of Ukraine worsened the inflation picture by pushing global
energy and food prices even higher.
U.S. crude oil prices were relatively stable, but are up nearly 60% in 2022.
Wheat prices are up about 50% and corn prices are up 30% this year.
Supply chain problems at the heart of rising inflation were worsened in the
wake of China's lockdown for several major cities.
The extra inflation squeeze has made it even more difficult for businesses
to offset costs and is seemingly prompting a shift in consumer spending away
from expensive items and toward necessities. It has also raised concerns that
the Federal Reserve may have an even more difficult time trying to temper the
impact from inflation.
The Fed is aggressively raising interest rates to fight inflation, but
investors are worried that it could potentially push the economy into a
recession if it moves too aggressively.
The yield on the 10-year Treasury, which helps set mortgage rates, slipped
to 2.74% from 2.75% late Thursday.